We know some of what new finance minister Enoch Godongwana thinks – because he’s told us
- Newly-minted finance minister Enoch Godongwana is not a fan of new taxes, and wants to lure investment through reform.
- He also thinks a basic income grant is a swell idea, which should probably be discussed some day.
- Godongwana has been telegraphing his economic views in 2021, ahead of his appointment on Thursday.
- Here's what we know about his economic thinking.
- For more stories go to www.BusinessInsider.co.za.
He is conservative when it comes to new taxes and the need for investment, and quite convinced of the moral need for a basic income grant or something similar, just not any time soon.
South Africa's new finance minister Enoch Godongwana has been direct about his economic views this year, from a platform as the ANC's head of economic transformation.
Just a week before his appointment he authored a column, in Business Day, with a broad outline of what he thinks South Africa needs to fix unemployment – in what now seems to have been a job audition of sorts.
It captured a set of socially liberal and economically conservative views not fundamentally different from those of Tito Mboweni, the man he replaces, but with a different emphasis in places.
Here are six things we know about new finance minister Enoch Godongwana's economic leanings.
He believes the need for a basic income grant is beyond debate...
"It is a reasonable and legitimate call given the high level of poverty," wrote Godongwana in his recent column. "No-one would disagree with the need to protect vulnerable members of our society."
That reflects what seems to have become broad acceptance within the ANC, across both the economically conservative faction and its radical counterpart, that a basic income grant is somewhere between a moral and a political imperative.
... and should absolutely be discussed – eventually.
Godongwana's predecessor Mboweni avoided the issue of a universal social safety net by pushing responsibility for a basic income grant onto the shoulders of "future policymakers".
The new minister does not believe he is that future policymaker. He would like to see strictly temporary Covid-19 interventions, keeping the R350 grant for people with no other income as an emergency measure only, while an appropriate social security policy is debated.
He has also steered well clear of the raging debate on how a basic income grant would be funded.
He is a reformer, of the capital-friendly school.
South Africa requires pro-investment reforms, Godongwana believes, and must get money – both public and private – flowing into economic and social infrastructure.
He thinks spending must be re-prioritised, because more taxes simply won't work.
Earlier this year Godongwana bluntly told an ANC policy discussion that government was spending on the wrong things, and that SA "can't tax our way out" of economic crisis, pointing to recent tax increases that did not yield substantial additional revenue.
He is a proponent of an active labour market policy.
Active labour market policies, or ALMPs, have been described as "a cornerstone of modern welfare states", a set of interventions by the government to get people into jobs and keep them there, including through subsidies and training.
While the modern South African government has always considered itself an active player in setting up people for work, ALMPs have a controversial side: "motivation and incentives to seek employment" or, as some put it, "coercion". In its classic implementation, those who don't participate have their benefits squeezed, and even cut off entirely.
He is focussed on young people.
Giving younger people the opportunity to work, rather than having them dependent on grants, is a key priority for Godongwana. His other policy proposals are often couched in terms of opportunities for young people: economic growth is needed so young people can find work, access to capital must be broadened so young people can start up businesses, and basic infrastructure must be in place, so young people can thrive.
(Compiled by Phillip de Wet)
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